Brazil plans power-sector reform, eyes boosting privatizations

Reuters

The Brazilian government made public on Wednesday proposals for broad changes in power-sector regulations, including measures that would facilitate asset sales by state-controlled power holding firm Eletrobras .

Brazil's Energy Ministry released the proposals as it opened a period of public consultations regarding the changes.

President Michel Temer's administration is seeking to attract private investment to the sector, which has struggled financially partly because of changes made in 2012 when the former administration renewed operating licenses for hydroelectric power plants at conditions now seen as unprofitable.

Among the proposals, the ministry is opening the possibility for companies owning dams that were targets of the 2012 changes to increase the price for the energy they sell. That would sharply benefit Eletrobras, or Centrais Elétricas Brasileiras SA, which controls most of those hydro plants.

Another proposed measure boosts prospects for the privatization of some of those dams. It says the government would reduce taxes on those assets, helping elevate returns for companies that buy them.

Eletrobras, which has sought to sell subsidiaries as a way to cut debt, is likely to benefit from the proposed changes.

The public consultation will receive contributions until the end of August.